Cloud Downtime
Insurance

Cloud downtime insurance is a specialized form of insurance designed to cover financial losses and other impacts that result from interruptions or outages in cloud services. This type of insurance is particularly important for businesses that rely heavily on cloud computing for their operations, as disruptions to cloud services can lead to significant financial losses and operational challenges.

Cloud downtime insurance provides financial compensation for losses incurred due to the unavailability of cloud services. This coverage can include downtime caused by technical failures, cyber-attacks, or other disruptions affecting cloud service providers.

Unlike traditional insurance, cloud downtime insurance, such as that provided by Parametrix, is typically parametric. This means the payout is triggered by predefined conditions, such as the duration and extent of the cloud service outage, rather than by the assessment of actual losses incurred.

We partner with Parametrix Cloud Downtime Insurance and they use a monitoring system to detect outages. If an outage meets the predefined criteria, such as a specific duration and affected regions, the policy triggers a payout.

One key feature of cloud downtime insurance is that there are no restrictions on how the settlement payments can be used. Businesses can use the payouts to cover service level agreement (SLA) liabilities, customer compensation, regulatory penalties, or any other costs incurred due to the downtime. Customers of Parametrix have used their claims monies for various purposes, including covering direct revenue losses and emergency public relations spending to protect their brand's reputation.

The insurance policy will specify the limits of liability, which are the maximum amounts the insurer will pay for a single outage event and in aggregate over the policy period. For example, limits can range from $100,000 to $1,000,000 per cloud provider used by a single client.

The insuring clause of a cloud downtime insurance policy will indemnify the insured for all losses incurred as a result of an outage event that occurs during the policy period, subject to the terms and conditions of the policy. An outage event is defined as an interruption in one or more of the insured cloud services, as detected by the Parametrix Monitoring System. The event starts when the system records no service and ends when the service is restored. When an outage event occurs, the insured company is notified, and a declaration of loss is submitted.

The policy includes exclusions for certain types of events, such as planned maintenance, insolvency of the cloud provider, government actions, and acts of war or terrorism.

Cloud Downtime
Insurance

Protection for your Service Level Agreement (SLA) Liabilities and customer compensations

Protect for Regulatory penalties incurred due to the downtime

Protection for Business Interruption for operations that depend on Cloud Providers for daily monetization such as eCommerce or Manufacturing)

Parametric Insurance triggered by events, instead of calculated losses as traditional insurance

Available for AWS, Azure and Google

Schedule a Meetng

Schedule a free Zoom Meeting consultation to discuss your specific protection needs and insurance requirements. Coverage is subject to underwriting and the terms, conditions and limits of the policy issue, and may vary from Insurer to Insurer.

Benefits of Cloud Downtime

The primary benefits of cloud downtime insurance include providing immediate financial relief to cover losses resulting from cloud service disruptions, helping businesses manage the financial impact of downtime, enabling quicker recovery and continuity of operations, and demonstrating to customers and stakeholders that the business is prepared for cloud service interruptions and committed to maintaining service levels

Cloud Downtime versus Cyber Insurance

Cloud downtime insurance and cyber insurance both address risks related to digital operations, but they cover different aspects:

Cloud Downtime Insurance:

Focus: Specifically covers financial losses due to interruptions in cloud services.
Coverage: Triggered by predefined conditions such as the duration and extent of cloud service outages.
Use: Compensation can be used for lost revenue, customer compensation, regulatory penalties, and other costs related to the downtime.

Cyber Insurance:

Focus: Covers a broader range of cyber risks, including data breaches, cyber-attacks, and other security incidents.
Coverage: Includes costs for data recovery, legal fees, notification expenses, public relations, and business interruption caused by cyber incidents.
Use: Provides financial protection against various cyber threats, including ransomware, phishing, and hacking.

While cloud downtime insurance focuses on mitigating the impact of service outages from cloud providers, cyber insurance provides comprehensive coverage for a wide range of cybersecurity threats and incidents. Both types of insurance are essential for businesses that rely heavily on digital operations, but they address different aspects of potential risks.